- Paul Burgess
IBM gives up on Healthcare, Snowflake is the database of the year and the humor in Oracle's cloud
IBM Sells off Watson Health
As is typical in a new year, technology vendors tend to make big announcements. The latest that was predictable was IBM's sales of their Healthcare Data and Analytics Assets to a private equity firm. On January 21, 2022 this press release gives a quick summary of in how IBM unloaded their Watson Health product line to Francisco Partners. After spending over $4B internally, the end of Watson Health was just as fast as it's rise off the backs of efforts that took place at MD Anderson. But after that relationship spoiled in 2017 - it was only a matter of executive departures, layoffs and reduction in R/D spend to bring us to this point.
The 'straw that broke the camels back' was an article about the overall health of IBM Watson published in the New York Times on July 16, 2021 that states
"But the grand visions of the past are gone. Today, instead of being a shorthand for technological prowess, Watson stands out as a sobering example of the pitfalls of technological hype and hubris around A.I."
As in all other IBM products that become 'non strategic', it is sold off as a means to make a little money back and to off load the people attached to it. Alas - the promise of AI-empowered data took a step back.
Snowflake is the database of the year
As previously introduced by this author in the blog "Liars, Money and Benchmarking", a personal analysis and hands-on review of Snowflake -vs- Databricks took place as Databricks 'drew first blood' publishing a questionable benchmark series. With the world having such a focus on everything 'cloud' it was found interesting how Snowflake was awarded the 'Database of the Year' by DB-Engines.
Upon a finer analysis of how DB-Engines measures and tracks the entire database market (currently they track over 365 database technologies), the means of measuring and review over time is what makes this compelling. The blog also mentioned
"In the overall DB-Engines ranking Snowflake started the year 2021 on rank 37 and has climbed 20 positions to rank 17 in the last 12 months, and this trend does not seem to find an end yet."
This is the only data management technology that has ascended so quickly in such a short amount of time. Finally, this breaks open two FIRSTS - as quoted
"Snowflake is not only the first software-as-a-service that has won the 'DB-Engines DBMS of the Year' award, it is also the first data-warehouse-centric product that makes it into the top three of this award."
The humor in Oracle's cloud
One thing you can say about the founder of Oracle, Larry Ellison, he is not without opinions. They also tend to be about how he makes money. In a 2015 article, Mr Ellison was quoted as saying about the cloud
"Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?"
Fast forward to 2022 and it is obvious he is only focusing on anything cloud because his clients are leaving. A financial measure that is worthy to compare is on an organization's balance sheet under liabilities called "Unearned Revenues" or "Deferred revenues". Because revenues are only booked as they are earned, any multi-quarter or multi-year commitments end up being 'unearned'. This also means if you take the latest quarter 'deferred revenues' and divide by current revenues and multiply by 90 you have the number days of revenues unearned. The higher the better. The higher the more revenues are already generally guaranteed in the future.
Company | Latest Deferred Revenues (from balance sheet | Latest revenues (top of P/L) | Days outstanding |
$10,116 M | $6,863M | 132 days | |
$768M | $334M | 206 days | |
Oracle | $7,937M | $10,360M | 69 days |
Workday | $2,493M | $1,327M | 169 days |
This means a born-SAAS database vendor like Snowflake is ~3x more successful in the overall business model compared to Oracle. The desire for Oracle to want to 'lock in' their customers is insulting. Gartners 2021 Magic Quadrant report about 'Cloud Databases' summed it up:
While Oracle Database is generally portable to other clouds, Oracle Database clients will pay for twice as many virtual CPUs when running on other clouds. Oracle Real Application Clusters (RAC) is not supported on other clouds, and Oracle Database is not yet certified to run on all major CSPs.
Enough said.